E.ON improves earnings with better UK sales

German utility E.ON reported May 11 adjusted Q1 2021 EBIT of €1.7 ($2.06)bn and adjusted net income of €800mn, up 14% and 19%, respectively, on Q1 2020. It said operating improvements, along with weather-related increase in gas sales volume, were key earnings drivers and its UK business returned to profitability.

CFO Marc Spieker said all its businesses delivered a strong operational performance in the first quarter: "I can therefore fully affirm our forecast for 2021, our medium-term financial and earnings plan, and our dividend promise."

Earnings at the Customer Solutions segment rose by just under €300mn relative to the prior-year period and thus almost doubled. In the UK, all Npower customers have been migrated to the new digital customer platform. It is a year ahead of its plan of surpassing £100 ($140)mn in earnings this financial year.

Energy Networks’ earnings were stable relative to last year. Although E.ON transported more energy in Germany owing to colder weather, expenditures for network expansion and upgrades also rose. E.ON’s business in central-eastern Europe and Turkey benefited from the initial consolidation of VSE in Slovakia, which was acquired in the third quarter of last year.

Spieker said the company was on course to achieve the target debt factor of 4.8 to 5.2 this year, and thus earlier than originally planned. It was also on course to achieve full-year adjusted EBITDA target of €7.2bn-€7.5bn and adjusted EBIT target of €3.8bn-€4bn. It therefore expects to achieve all its targets for 2021 and its medium-term earnings plan through 2023, including its dividend promise.